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Apple Announces 2 for 1 Stock Split
neosar82 writes "Yahoo has a story about Apple's stock split. Apple Computer Inc. whose shares have almost quadrupled in value over the last year on the success of its iPod music player, on Friday said it set a 2-for-1 stock split, and its shares rose almost 4 percent. Under the share split, Apple shareholders of record at the close of business on Feb. 18 will receive one additional share for every outstanding share held. Apple said trading will begin on a split-adjusted basis on Feb. 28."
See, Apple still remains true to it's values: You always could have done better with them, no matter how well you've done already. :)
:)
With hardware, they'll upgrade before you have have time to put your card back in your wallet.
With software, it's often the same - unfortunately, those sellouts at Cupertino at making upgrades cheaper, or free (a la FCP-HD).
I must say, this is a very refreshing move. Let's see how long it takes them to get to $80 again
--- Egads, I glow in the dark!
No shit dumbass. But stock splits occur after the stock has gone up and is expected to go higher. Stock splits are just an indication of a healthy investment.
[insert lame joke here]
Sure - do you accept the Elbonian Eyecrud?
I, personally, would be buying some o' that fruity goodness right now... were it not for the fact that I'm broke. Worse yet, I'm broke in Australian Dollars.
Yet another piece of Apple I'm destined to drool over, but never own...
--- Egads, I glow in the dark!
Share splits:
Before share split: 50,000 shares own a company. Compant has $1m earnings, makes $20/share earnings
Stock splits 2:1 but company fundamentals stay the same (simplisitc, but no reason splits affect the earnings of a company).
,br> Company still earns $1m. But not t has 100,000 shares that makes it $10/share. If shares are values on a fundamental basis it makes no difference. If shares are viewed on a tachnical basis (see technincal analysis, the opposite of 'fundamental analysis') it also makes no difference as price charts auto-adjust splits.
The reason share prices may react positively to share splits is because it increases lqiuidity in shares (lower prices making them more accessible to small-time retail mom-and-pop investors who may just buy 1 or 2 shares, though this is less so in an era of mutual fund saving), or as ait signals to investors that management are tuned into them - just a communication/signalling mechanism. It may also trigger second-thing-n guessing of other investors betting against each other's reactions, but this is market-situation rather than company speculation.
Share splits are the result of good news and really not good news in themselves.
...let's hope they don't find a worm inside.
Or even worse, half a worm.
(I know, I know, corny old joke... but I just couldn't resist!)
About 2-3 years ago I almost convinced myself that I should buy Apple stock. At that time, each share cost about 16 bucks...
I didn't buy any, thinking that I was maybe being a victim of St. Steve Job's reality distortion field (I'm as big an Apple fan as you can get) and that maybe the stock would plunge. After all, we were stuck with that damn G4. (And it kinda feels strange to buy stock when you're still in high school.)
Then iTunes Music store came out of nowhere. The stock litteraly exploded. Still didn't buy, thinking "economics 101: buying when high (the price, not me
Now the stock is at 81 dollars, that's a 65 $ increase per share, damnit. And yaknowhat? I still won't buy, cause I really don't see how it would rise again?! Maybe if Apple announces OS X for PC (see "Fortune" article). Maybe if they sell half a billion mac minis. Maybe if someone finds out that the iPod shuffle solves cancer, AIDS and world hunger. Maybe.
Anyways, it sort of confirms what I always thought about stock markets: those fucking "analysts" are on crack all the time. I mean, that Apple stock was vastly underrated three years ago. Now it's completely overrated, Apple is in good shape and all, but it's simply not that worth! There's no way in hell Apple is worth 72,9 BILLION dollars (900 million shares @ 81 dollars. I know, I'm vastly oversimplifying, but still...)
Hello! I'm a disaster waiting to happen!
Warren Buffett's Berkshire Hathaway has never split its stock, which is all you need to know about stock splits, AFAIC
True, but the price of Berkshire Hathaway stock is currently $91,000 per share.
While nice for the stockholders, I'd expect that to limit liquidity somewhat, because there just aren't as many people with funds to buy stock at $91,000/share. Today only 290 shares traded. 3 month average volume is 393 shares. (It'd probably be harder to make an option-based incentive program work with so few shares outstanding. And you can pretty much forget about non-executive employees having stock in the company.)
Like it or not, many (probably most) investors are not perfectly rational creatures. They'll buy a stock, after a split, because the share price drops into a range that they find attractive or accessible.
If someone would like to invest in Apple right now, they might not have $8,000 available to buy 100 shares. On February 28, they'll be able to buy 100 shares for $4000 or so, which perhaps they can afford.
Now, if you're Homo Economicus ( a runtlike feral creature recently discovered in fossils on an island in Southeast Asia) you understand that halving the price doesn't necessarily make Apple any better of a buy. It's not like a half-price sale.
But most people aren't that rational. They invest like it is a half-price sale. Never mind that you're getting half as much of Apple when you buy a share.
Splitting a stock helps companies take advantage of this kind of behavior. At a given price, there will be people who want to buy, but can't. Halve the price with a split, and those people will buy, unless the fundamentals are atrocious. If the company was good enough to buy, pre-split, but cost too much, they'll buy post-split, which helps drive the price up again.
There's a big psychological factor. It's also part of why companies occasionally do a reverse split, to raise the price of their stock. If a stock is down around $5 or less, like Sun's, it just looks like a loser, fading into inconsequence.
September 2011: Looking for Cocoa/iOS work in Boston area Cocoa Programmer Quincy, MA
That was about 3+ years ago, at one of Apple's low points. The stock has about quintipled ($10/80). OSX was so clearly in the right direction, albeit broken that it was indicitive of good things (iPod,Mini, Xserve clusters, etc.) of things to come.
There formula for success is the same as google's. Build an efficient user-experience over a solid backend.
I bought a powerbook and an ipod with apple's "cram and jam" program for college in the fall of '03. After one week of using it, I was convinced that I should buy some apple stock. I was amazed at how beautiful and powerful OS X was, and how easy to use the iPod was. I thouhgt that if Apple kept up the marketing, they could takeover the mp3 player market and make a dent in the laptop market I tired to convince my parents to give me some money to invest, but they thouhgt that they were already spending enough on my tution, plus my laptop. I think apple stock was in the high teens at that time. If i had gotten to put the grand I wanted to into apple, I would have enough money to buy myslef a dual g5. next time I have an inkling about a company with an awesome product, I'm jumping on it.
sorry 'bout the mess...
Damn beleaguered company...
'Nuff said.
OK, maybe it's not. Let us all try to remember the number of times that adjective was used to describe the company. I don't think I can count that high. And yet...yet there are STILL nay-sayers...
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
*ANY* company's stock is not simply a measure of "what it's worth" -- it also includes expectations of what it might become. In the case of Apple's current stratospheric valuation, one might look at the current market share enjoyed by Apple in the personal computer world (around 3%), and wonder what if they were able to do there what they have done in the personal music player marketplace?
Let's suppose that J. Q. Publicus *is* approaching a tipping point with regard to frustration about virus/worm/adware crap. If that 3% market share were to grow to, let's say, just for purposes of illustration, 9%, then the earnings contribution by Mac sales will AT LEAST triple, due to manufacturing efficiencies, no additional development expenses, yada yada yada. Suddenly today's pricing of the stock doesn't look so extreme anymore.
That is a simple rationale. Others are based on the theory that the world market for digital music will grow A LOT -- and since Apple *owns* that market, their revenues will grow with it.
One is (or should be) always looking for instances of where the "efficient market" is out of step with reality. Many times, one is wrong. But the essence of investment theory is to search out, using various metrics (technical "analysis", Ben Graham's work on valuation, astrology, whatever works), these instances of where the efficient market isn't, evaluate the risk, take a position, and wait for reality to catch up.
Those who invest via the "driving throught the rear view mirror" approach are destined to run off the road and crash. To properly invest, one has to look ahead (as well as behind and side-to-side), and not drive faster than conditions dictate (i.e., if you leverage yourself to the hilt and can't react quickly enough to the potholes in the road...), and be cognizant that the road ahead (that would be the future) is almost always enshrouded in fog.
As to whether Apple is priced fairly today, it depends upon exactly what future unfolds for it.
BTW... I *did* buy back then (a bit later, actually), based upon valuations and the huge pile of cash Apple was sitting on. I'm still holding it, waiting to see where it will peak. I look for it to sell off a bit sometime this year, and if there are signs that the Mini Mac is selling strongly into the Windows domain, I'll probably buy some more. However, it could just as well turn out that Apple drops the ball and is unable to satisfy demand, or that the hoped-for demand never materializes.
If you can't identify market inefficiencies, or foretell the future with some degree of accuracy, stick to index funds.
Obviously a mousebutton split is to follow. And Apple will never be the same. Mark my words.
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Stock splits are exactly that - a quick way to issue double that class of stock.
.then this is not the time to buy.
If Apple is trading at pretty close to the top of their market ( aside from Tiger and the new Apple Portable Campstove a/k/a a G-5 laptop and whatever the Mini turns out to be) and there doesn't seem to be any Insanely Great stuff in the pipeline. .
Buying at or around the split is buying "high" - however, if the Mini really does make significant inroads into the Wintel world or becomes a home entertainment center - then the split allows more shares to trade and trade volume could increase....and, share price might go up.
If you want to wager - well, the market odds are not as bad as a casino... most of the time (e.g. ENRON).
Stick with a well-diversified portfolio and enjoy the fact that the Bond market will beat Bush into line sooner or later over the deficits.
Wall Street Confirms it: Apple is dying.
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